The Friday Market Minute
- Wall Street futures bump higher on plans for fiscal stimulus in China and last night's Brexit delay vote, helping the S&P 500 extend its 12% year-to-date gain.
- China vows tax cuts, market reforms, in "employment first" economic stimulus as U.S. trade talks slowing edge forward.
- Bank of America Merrill Lynch says U.S. stocks see net inflows of $25.5 billion this week, the highest in a year, as investors dump emerging market stocks to ride Wall Street's bullish wave.
- Global oil prices extend gains, taking WTI crude to four month highs, as OPEC cuts and US sanctions continue to support markets.
- Dow futures suggest a 90-point opening bell gain ahead of industrial production data at 9:15 am Eastern Time.
U.S. stocks are poised to close out the week with solid gains in the Friday session, as global investors plow cash back into equity markets following the removal of "no deal" Brexit risk, a reiteration on stimulus plans from China and cautious optimism on trade talks between Washington and Beijing.
With UK lawmakers voting to seek an extension of the March 29 Brexit deadline last night, a move that pushes Britain's EU departure forward at least three months, and votes that effectively mean the nation can't leave without a trade deal, one of the market's biggest risks appears to have been avoided.
A second major risk -- a pronounced slowdown in China, the world's second largest economy --- was also addressed this week, with Premier Li Keqiang telling reporters at the end of the annual National People's Congress that Beijing is determined to pursue steep market reforms while cutting taxes and adding billions in stimulus in order to push an "employment first" economic strategy.
The collective decisions, set against the backdrop of dovish central banks around the world and a still-solid U.S. consumer, has helped global stocks attract more than $14.2 billion in net inflows this week, the most in a year, according to Bank of America Merrill Lynch's benchmark fund manager's survey, with a net $25.5 billion finding its way into the United States as investors retreated from emerging markets.
U.S. equity futures suggest the bullish tone will lift Wall Street into solid Friday gains as a result, with contracts tied to the Dow Jones Industrial Average suggesting a 120-point opening bell gain while those linked to the S&P 500, which has gained 2% this week and more than 12% for since the start of the year, are indicating an 11 point boost for the broader benchmark.
European stocks scaled fresh five-month highs Friday, with the Stoxx 600 rising 0.61% and Britain's FTSE 100 booking a 0.55% advance, thanks in part to last night's Brexit delay vote, which will likely see Prime Minister Theresa May ask for a three-month extension from Brussels in order to allow for more time to find a parliamentary consensus on how Britain will leave the bloc.
Asian markets were also firmer, following on from China's reiteration of stimulus plans and solid after-the-bell gains for U.S. tech stocks, with the MSCI Asia ex-Japan index rising 0.58% and Japan's Nikkei 225 closing out the week with a 0.77% that lifted the benchmark to 21,410.85 points.
Global oil prices however, slipped from four-month highs after the International Energy Agency made no changes to its 2019 demand forecast and added that OPEC members could absorb any supply shocks from Latin America with increased production rates.
Oil has gained near 40% since hitting a multi-year low on Christmas Eve as the collective impact of OPEC production cuts and U.S. sanctions on Iran and Venezuela continue to offset record American production rates, which the Energy Department pegs at around 12 million barrels a day.
Brent crude contracts for May delivery, the global benchmark for oil prices, were marked 28 cents higher from their Thursday close and changing hands at $66.95 per barrel while WTI contracts for April delivery, which are more tightly linked to U.S. gasoline prices, were seen 12 cents higher at $58.49 per barrel, the highest since November 12.